How to deal with Offshore Software Development

Software development outsourcing is the top trend in the tech globe. In which, offshore software development becomes more and more popular.

Along with the rapidly changing in IT market, the demand for mobile and web application development is on the rise. Moreover, IT software refers to be speedy and outdated, which requires regular updates and development. These enormous works struggle for SMEs and non-tech firms.

Undoubtedly, investing in tech is inevitable but expensive. Therefore, several businesses choose to outsource their software development to professional companies, which will be responsible for developing, managing and upgrading the software.

Compare to the native country, using offshore outsourcing services could reduce the investments for clients. Particularly, the low level of living standards in some countries induces the inexpensive labor cost for developers. Firms could significantly save time and effort through specialization.

On the contrary, offshore software outsourcing might contain several difficulties, including communication and culture gaps. This article tries to access those issues to guide firms on how to deal with offshore software development.

Definition of Onshore, Nearshore, and Offshore software development

Offshore software development

Offshore software development or software outsourcing development tends to transfer the whole or part of software or apps to third parties. Outsourcing parties could be companies or freelancers. Recently, firms in developed countries have an incentive to outsource their mobile apps or web developments to other nations.

For delegating a comprehensive project, a full-cycle software development company tend to be a sufficient choice. In which, it could guarantee trustworthy expertise, experience, and skilled developers. Currently, a typical destination for software outsourcing tends to be Asia, which contains the most moderate project cost and qualified software developers. In general, Offshore software development occurs when the headquarters of clients and providers are in different time zone.

Onshore and Nearshore software development

If a firm cares much about location, or it prefers working with a software company partner near the headquarter, it should consider other outsourcing types: onshore and nearshore. While onshore software outsourcing means that partners are in the same native country, nearshore outsourcing shows the contract between parties, which are close in terms of geography.

Onshore, nearshore, and offshore refer to three popular patterns of software outsourcing models, which basically depend on the location of the host company and IT development providers.  

Benefits of using offshore software development team

Cost-saving: companies have an incentive to hire an offshore software development team in low-cost countries. Western firms will save 50-80% of investment when outsourcing their software to Asia. Additionally, professional outsourcing companies tend to provide extra service at no cost for their strategic clients, which significantly reduces the price of projects.

Skillset and qualified developers: Obviously, offshore software development providers are a family of talents, which have skills and experience, specializing in IT and software development. For instance, Vietnam is famous for an abundant number of IT engineers, which accounted for roundly 10,000 IT engineers graduating annually. In terms of skillset, each offshore software development company has expertise in some particular industries. If web and mobile applications are developed in an appropriate industry, firms should contact partners with specific expertise.

Advantage of business scale: for flexible outsourcing projects, clients could commonly require adding or subtracting offshore development members to fit their needs. By keeping the optimizing number of developers, firms tend to properly manage their budget.

Valuable statistic of Offshore software development

In 2019, the global market size for IT outsourcing services reached about US$ 80 billion, which was roundly 8% higher than that in 2018.  Research implies that Asia-Pacific will experience significant growth in the next five years since the remarkable increase in e-commerce enhance enormous data collection. About 54% of firms outsource their projects to third-party. In particular, Vietnam has the first time to become the top location for software outsourcing. Vietnam holds the advantage of low costs, low risks, and ideal operational conditions.

Common difficulties when hiring offshore software development company

The threat of data leak: offshore projects require idea sharing, which could lead to information theft. A development company could use clients’ innovative ideas and sensitive information for private purposes.

Culture differences: working with a development team in different time zone cause difficulty in communication. When two companies have distinct office hours, they should clearly define a particular time for meetings or discussions. Different culture causes misunderstanding when approaching ideas or problems.

Management difficulty: managing outsourcing teams cannot be accessible due to the remote work process. Clients might struggle in timely solve issues that occurred in teams. The proper way is to hire a team manager, who represents the firm in leading software team.

Offshore software development practice

Here is one comprehensive guideline to deliver an effective offshore development process.

1. Clearly define goals and objectives

The initial step in creating plans is to clarify goals, KPI, as well as preparing sets of necessary documents in detail.

2. Choose the right offshore development team

Clients should carefully research the right software development companies. Then shorten the list due to some criteria, including size, cost, expertise, and experience. The ideal partner should thoroughly understand the clients’ visions and imagination. Additionally, they have to be specialists in the industry field.

3. Keep track on the process

Since the offshore development team and clients cannot stay together in the same offices. Then, firms should keep an eye on the current tasks to timely encounter obstacles.

4. Check and change when doing offshore development

Both clients and the development team should strictly follow the plan. Therefore, when issues have been found, the process has to adjust to reach the expected result.

5. Store reusable components during offshore projects

There are several software components that clients could be reusable. Clients should require developers to build a library to store these components for future use.